NCCPL reshuffles securities eligible for financing instruments

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) has reshuffled securities eligible for trading under different financing instruments, which it introduced to help current and potential investors in effective, efficient and transparent trading in the capital market, a notification issued on Monday said.

List of eligible securities has been revised under the margin financing system (MFS), margin trading system (MTS) and securities lending & borrowing (SLB) effective from March 17, 2017.

As many as four companies have been included in the list of margin trading system eligible securities, including Faysal Bank Limited, Power Cement Limited, Quice Food Industries and Treet Corporation while Hascol Petroleum and Amreli Steels have been excluded from the list.

All margin trading system transactions are executed through online trading system provided by NCCPL to market participants. It is an undisclosed market for financees and financiers and the maximum mark-up rate is KIBOR+ eight percent.

All transactions executed in this market are based on financing participation ratio of 15 percent. Three companies have been included in the existing lists of margin financing eligible securities and SLB eligible securities, including Service Fabrics Limited, TPL Properties Limited and Loads Limited while ten companies have been excluded from both these lists, including Brothers Textile Mills, Mirza Sugar Mills, Pangrio Sugar Mills, Associated Services Limited, KASB Corporation, Resham Textile Industries, Pakcem Limited, First Constellation Modaraba, First Dawood Mutual Fund and Standard Chartered Leasing Limited.

Margin financing facility is made available to all members against the net ready market purchases of their clients and proprietary positions. It can be obtained as per the agreed financier participation ratio. However, the minimum of 25 percent should be contributed by the financee. NCCPL provides a system to margin financing participants for recording and settlement of transactions.

SLB transactions are executed through an online trading platform provided by NCCPL to lenders and borrowers for placing offers and bids. It is an undisclosed market for lenders and borrowers; wherein, the motivation for lenders is to earn income / return on their idle securities, while borrowers may utilise it to avoid delivery failure in the ready market or to make a short sale